U.S. Government Shutdown Driving Canadian Mortgage Rates Lower, For Now

U.S. House Speaker John Boehner and President Barack Obama. The U.S. government shutdown is good news for Canadian mortgage rates, at least for now. (AP Photo/Carolyn Kaster)

The U.S. government shutdown has had an interesting side effect for Canada: It has held out the promise of lower mortgage rates, and therefore a stronger housing market.

Not that the housing market needs much help these days. Housing starts jumped 5.3 per cent in September, according to data released Tuesday by Canada Mortgage and Housing Corp., beating analysts’ estimates. All parts of the country saw rising starts except Ontario, where they fell 15.6 per cent.

But the housing market could see even more heating, thanks to the U.S. shutdown. That’s because, with the economic uncertainty, investors are flocking to bonds, driving down bond yields. Fixed-rate mortgage rates are tied to bond yields, so mortgage rates are going to come down as a result, according to RateSupermarket’s mortgage outlook panel.

This newly-built home just northwest of downtown Calgary not only looks cool and has excellent views of the city, it features some pretty slick amenities, such as built-in kitchen appliances, a 1,500-bottle wine cellar and five bedrooms across 5,300 square feet of living space.

This house in Montreal's old-money Westmount area was built in 1857 and, with its awesome wrap-around porch, may be the coolest heritage residential building for sale in Canada right now. It's actually three units -- a main house, a townhouse in the back and what's referred to as the "well house." Three bedrooms and two baths in the main house.

Can you say house with a view? This four-bedroom property features not only one of the best views out of anyone's living room window in the country, it also has an outdoor pool, sunk slightly below house level, with views all its own. Four bedrooms and an elevator in this house the realtor describes as an "amazing entertainment home."

Located in Vancouver's (now) prestigious neighbourhood of Kerrisdale, this house is described by the realtor as "an expression of West Coast Modernism." We're not sure what that means, but this house's situation next to an elegant outdoor pool is certainly eye-catching. Four bedrooms on 5,200 square feet of living space.

The coolest thing about this house is the location -- look at where it's sitting! Not for the faint of heart, this eight-year-old house sits perched 90 feet above the Atlantic Ocean on the Nova Scotia coast. Five bedrooms in this property that sits on 16 acres of land.

This house may look like a remade 19th-century train station, but look carefully: There's a two-car garage on one side. The house is actually only four years, and situated in pleasant Bedford, outside Halifax. The house features an elevator to the second floor, and a master bedroom with fireplace and six-piece ensuite bathroom.

Designed by Ottawa architect Barry Hobin, this 3,300-square-foot house near the city's ritzy Rockcliffe Park neighbourhood features a sixty-foot-high domed skylight and some pretty non-standard layouts.

From above, this house is shaped almost like a hexagon, but that's not the only cool thing about -- it's also located on an outer beach not far from St. John's. Dubbed "Burnt Island," the property is made of red cedar log and features three bedrooms in 3,100 square feet of living space.

This house's a unique take on the Roman column look is certainly controversial, but for those who do like the look, the home is a winner. Twelve thousand square feet of living space in this house with seven bedrooms, including two loft bedrooms, a rec room, an exercise room, a sauna and a wet bar.

The realtor describes this as a "modern day Mad Men entertainer's home," and there is definitely something "retro-modern" about this three-bedroom, 4,200-square-foot bungalow. The house has a "covered outdoor living room" -- only in Vancouver could you find that in Canada -- that features a pool with a hardtop.

This house that the realtor boasts was featured in Architectural Digest is something increasingly seen in the dense inner cores of Canadian cities -- modern architecture reflecting the traditional houses nearby. Promos for the house promise a "New York Upper East Side feel" in this five-bedroom property.

It may not look it from its industrial-modern design, but this house is, according to the realtor, a ravine oasis. Located in the city's upscale Lawrence Ave. area, the house features a 23-foot ceiling in the foyer, a glass spiral staircase, an indoor squash court and a sauna on 5,100 square feet of living space.

Not many pictures available of the exterior of this house, but just look at this pool! Possibly the awesomest indoor pool in a private residence in Canada. The rest of the house ain't bad, either: 12,000 square feet of living space, with nine bedrooms and 10 baths, a 25-foot-high ceiling at the main entrance, and underground car parking.

This is a huge house -- more than 8,500 square feet of living space. Besides the eye-catching front entrance, the house features a 22-foot barrel vaulted entrance and more than 500 feet of private waterfront. There's also a three-car garage.

The realtor promises an "indoor and outdoor lifestyle" in this oceanfront house in West Van. The house's three levels overlook a central atrium and the lower level features a heated swimming pool and jacuzzi. The house has an elevator, naturally, and a boat ramp.

Located about 100 kilometres outside Montreal, this summer "cottage" is located on a private peninsula on Lac du Nord. The house features an infinity pool, a wine cellar, and a movie theatre. And oh yeah, there are bedrooms too, six of them.

In a letter to Prime Minister Stephen Harper, Claude Dauphn, president of the Federation of Canadian Municipalities, urged the federal government to help address the shrinking supply of affordable housing.

“Some have had to walk away from deposits worth tens of thousands of dollars. Others have been forced to borrow from family — or against their principal residence — to come up with final payments on condos that lenders are no longer keen to finance,” the newspaper reports.

It’s not just a question of lenders being more cautious in today’s housing market; tighter mortgage rules brought in by the federal government last year mean many who bought condos two or three years ago now have to make larger down payments than they bargained for, the Star reports.

“This is the hardest environment I’ve seen for borrowing money in the last 10 years,” Toronto condo developer Brad Lamb told the newspaper.